Market Competition、Managerial Power And Executives Compensation Stickness

Since listed companies disclosed their executive compensation in the annual report,the executive compensation of listed companies has been highly concerned by the public.As an incentive mechanism to alleviate the company’s agency problem,whether the executive compensation contract is effectively implemented has an important role in the company’s development.At present,the performance-based compensation assessment system has become the basic choice for listed companies,and the sensitivity of executive compensation performance has gradually been enhanced.However,in recent years,the phenomenon that declining performance is accompanied by increasing compensation has been shown in the market.Contrary to the performance-based compensation system,scholars refer to this phenomenon of “upside down” as compensation stickiness.Is there a failure behind the chaos of compensation that performance-based compensation assessment system is invalid? What are the factors that affect executive compensation stickness? A series of studies have been conducted by domestic and foreign scholars on these issues,but no unified conclusion has been reached so far.The existence of executive compensation stickness indicates that the incompleteness of the current compensation contract in the enterprise,and the principal-agent problem is still an important issue affecting the benign development of the enterprise.There are two problems worthy of further study that whether the power of the management of the agent will have an impact on executive compensation stickness and whether the market competition will affect executive compensation stickness as an external governance mechanism.Therefore,it has important practical significance for improving the executive compensation contract system and alleviating the agency problem in the current context to study the issue of executive compensation stickness.This paper selects the 2013-2017 Shanghai-Shenzhen A-share main board listed company as a research sample and constructs a multiple linear regression model for empirical analysis,and studies the characteristics of executive compensation stickness from the perspective of market competition and management power.Through empirical regression analysis,this paper mainly draws the following conclusions:(1)The executive compensation of listed companies in China has asymmetric salary performance sensitivity when the company’s performance rises and the company’s performance declines,and executive compensation has stickness characteristics;(2)The power of management has a positive impact on executive compensation stickness,which shows that the more powerful the management is,the more it can use its power to influence the formulation and implementation of the compensation system,so that the board of directors can pass the compensation contract that benefits themselves,which increases the asymmetry of the sensitivity of executive compensation performance when performance rises and falls and in turn increases the stickiness of executive compensation.(3)Market competition,as an external influence factor of the enterprise,can effectively suppress the positive effect of management power on the executive compensation stickness.In this regard,listed companies should further improve the corporate governance mechanism,and combine the market competition effect,give full play to the supervisory role of directors and supervisors,restrict the excessive expansion of management power,rationally formulate executive compensation,and give full play to the incentive effect of the compensation contract to ensure the continued growth of shareholders’ interests and corporate value.